PRC ponders action in face of planned plant closure

Government, environmental groups and utility all weigh in

Story Highlights

The majority owner of the San Juan Generating Station, the Public Service Company of New Mexico, plans to shutter it in 2022.

The PRC was supposed to discuss today whether it should begin hearing arguments about the closure, but that discussion was delayed.

PNM is required to apply for abandonment before it closes the station.

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The planned closure of the San Juan Generating Station in Waterflow could lead to some difficult decisions for members of the New Mexico Public Regulation Commission.(Photo11: Hannah Grover/The Daily Times)

FARMINGTON — Members of the New Mexico Public Regulation Commission must decide if delaying debate about closing the San Juan Generating Station for several months will erode its power, as PRC staff members have cautioned it could.

The majority owner of the power plant — the Public Service Company of New Mexico — plans to shutter it in 2022. If it does choose to move forward with hearing debate on the case, some entities — including PNM — warn that it could prevent the state Legislature from passing legislation to help San Juan County deal with the economic impact of the closure.

That concern was echoed by environmental advocacy groups like the Coalition for Clean and Affordable Energy, and Western Resource Advocates. They cited a clause in a state law preventing the Legislature from passing laws relating to pending cases.

The New Mexico Attorney General's Office and the PRC utility division's staff disputed that claim in a joint filing to the PRC with the Albuquerque Bernalillo County Water Utility Authority and New Mexico Industrial Energy Consumers. Those entities argue the commission could require PNM to model scenarios that include potential legislative outcomes.

Those include already proposed renewable portfolio standards, as well as a securitization bill that could be introduced. The securitization bill would provide a way for PNM to recoup some of its lost investment in the generating station. It also would provide economic assistance to San Juan County to offset the loss of the generating station.

The joint filing argues that the commission needs to be involved since PNM is moving toward closing the generating station.

"Abandonment is a regulatory approval process that must occur before a utility begins the steps that lead to the closure of the plant," the filing states.

PRC discussion delayed until next week

The PRC was supposed to discuss today whether it should begin hearing arguments about closing the San Juan Generating Station. However, the commission staff asked to postpone that discussion until next week.

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The New Mexico Public Regulation Commission was supposed to begin hearing arguments about the planned closure of the San Juan Generating Station this week, but that discussion was delayed.(Photo11: Hannah Grover/The Daily Times)

The PRC meets at 9:30 a.m. Wednesdays in Santa Fe. The meetings can be viewed online at nmprc.state.nm.us.

PNM says it is too early to debate abandonment

PNM is required to apply for abandonment before it closes the San Juan Generating Station. While the utility has indicated it plans to close the generating station in 2022, it has not filed an application seeking permission to do that. PNM has stated it will file that application by June 30.

“No actual or irrevocable abandonment of San Juan Generating Station ... is currently underway,” PNM states in a filing to the PRC.

The company argues that it has only engaged in the exchange of preliminary contractual notices. Those notices include asking other owners if they are interested in continuing operations of the generating station after 2022 and informing the coal supplier that the plant could be closing.

In addition, PNM argues it is too early to consider abandonment partially because the San Juan Generating Station may not close in 2022 because the city of Farmington has the option to acquire the generating station.

In a filing this week, PNM stated the generating station will not close if Farmington finds a new operator and chooses to acquire the power plant. Farmington is the sole owner that is interested in keeping the power plant open after 2022. The other owners have all stated they do not intend to receive power from the station after 2022.

New Energy Economy claims delaying could erode commission authority

While PNM argues it is too soon to begin proceedings, other entities claim that waiting will leave the PRC with little regulatory authority.

The Santa Fe-based environmental advocacy group New Energy Economy states in a PRC filing that delaying the case could leave the PRC with no choice but to accept whatever replacement power plan PNM submits because there won’t be time to develop something different.

“This is a massive moment in New Mexico’s history — with the potential for enormous benefits for the health and economy of our state and, literally, the earth,” the response states. “We must proceed transparently, carefully and deliberately in order to achieve this potential.”

Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at hgrover@daily-times.com.